• Latest
The Importance Of Making A Proper Will

Should GRENLEC be Nationalized?

6 years ago
More than 4,000 commercial loan deferrals in Grenada 

Mt Hartman investors to pay no less than US$55 million for land ownership

8 hours ago
National Youth Parliament to mark Commonwealth Day 2021

National Youth Parliament to mark Commonwealth Day 2021

11 hours ago
RGPF Reports 77% detection for 2014

Equipment seized from Victoria businessman

13 hours ago
Cruise ship cancellations

GoG committed to balancing development with environmental concerns

18 hours ago
Third Tissue Cultured Banana Pilot Project training

Third Tissue Cultured Banana Pilot Project training

1 day ago
Property Tax 2015

Taxes due for March 2021

1 day ago
President Maduro Invites Caricom Chairman to Mediate in Venezuela Dispute

Venezuela donates US$200,000 to Grenada for purchase of Covid-19 vaccines 

1 day ago
June 2013 CXC (CSEC) Summary

CXC strategy for 2021 regional summer examinations

1 day ago
This Day in History

This Day in History: 3 March 1795

2 days ago
Archaeological fieldwork completed at La Sagesse

Archaeological fieldwork completed at La Sagesse

2 days ago
Reopening of schools: Phased approach to accommodate CXC exams

Consumables for Schools Advisory

2 days ago
Grenada inaugurates its renovated Olympic Committee with support from Panam Sports

Press Statement from the Grenada Olympic Committee

2 days ago
NOW Grenada

Main Header Ad 468x60

booked.net
  • Front Page
  • Categories
    • General News
      • All
      • Agriculture & Fisheries
      • Arts & Culture
      • Business
      • Education
      • Environment
      • Health
      • History
      • Lifestyle
      • Law
      • Politics
      • Technology
      • Travel & Tourism
      • Weather
      • Youth
    • Sports
      • All
      • Athletics
      • Cricket
      • Football
      • Watersports
    • Community
      • All
      • Tribute
    • Crime
    • Features
      • All
      • Today in History
    • Opinion/Commentary
    • Press Releases
      • All
      • Advertisements
      • Notices
  • Video
  • Notices & Vacancies
  • Advertise
  • Contact Us
No Result
View All Result
  • Front Page
  • Categories
    • General News
      • All
      • Agriculture & Fisheries
      • Arts & Culture
      • Business
      • Education
      • Environment
      • Health
      • History
      • Lifestyle
      • Law
      • Politics
      • Technology
      • Travel & Tourism
      • Weather
      • Youth
    • Sports
      • All
      • Athletics
      • Cricket
      • Football
      • Watersports
    • Community
      • All
      • Tribute
    • Crime
    • Features
      • All
      • Today in History
    • Opinion/Commentary
    • Press Releases
      • All
      • Advertisements
      • Notices
  • Video
  • Notices & Vacancies
  • Advertise
  • Contact Us
No Result
View All Result
NOW Grenada
No Result
View All Result

Article Header

Should GRENLEC be Nationalized?

This story was posted 6 years ago
9 December 2014
in OPINION/COMMENTARY
4 min. read
Sir Lawrence A Joseph
Share

By Dr Lawrence A. Joseph

As a consequence of the continuously rising costs of electricity in Grenada, many are suggesting that the company which presently has the monopoly to supply electricity throughout the state should be nationalized. The main question to be asked therefore is: Would it really be a good thing for the country if GRENLEC is nationalized?

The Public Works Department of the government of Grenada was the first supplier of electricity in Grenada in 1928. In 1960 this enterprise was privatized after the establishment of the Grenada Electricity Services Limited (“GRENLEC”). The Commonwealth Development Corporation (CDC) which was based in London owned the majority of its shares and the government of Grenada owned the minority. This privatized status of the company lasted until it was nationalized by the People’s Revolutionary Government (PRG) in 1982.

Since this acquisition, the PRG could not keep up with the ever increasing demand for the supply of electricity and there were numerous outages for lengthy periods. Load-shedding of electricity was the order of the day. It was very clear at the time that there was a dire need for the injection of adequate capital into the enterprise to enable the purchase of new and advanced machinery and other equipment. The nationalized status of GRENLEC seemed to have been incapable of providing this lifeline.

Nationalization presents its own problems. Liberal democratic countries in recent times have abandoned this approach and instead opt for privatization. Prior to 1979, the United Kingdom possessed one of the largest public enterprise sectors in the whole of Europe especially under the then socialist oriented Labour Party. This party generally followed the path of nationalization of key industries. Since then however, successive governments, especially the Conservative Party under Prime Minister Margaret Thatcher privatized most, if not all, of the state controlled enterprises and allowed competition. This position holds, even to this day.

In Jamaica, when Michael Manley won the general elections in 1972, he followed the path of nationalization. This approach proved to be a failure. Since then the process of privatization in Jamaica made significant strides to the present period. Presently privatization is the keynote approach with regards to the energy sector where there is open competition for the generation of electricity in that country.

Nationalization is characterized by certain distinctive drawbacks. With nationalization, governments generally have a monopoly so that having a profit motive is not high on the agenda. The highest objective usually relates to just providing a social service which sometimes does not contemplate the cost-effectiveness of certain actions. Enterprises for example may become labour intensive in order to suit political purposes giving scant regard for efficiency. Additionally, governments do not have or are reluctant to put in significant capital for technological advancement because money is also required by competing sectors such as health, education, and agriculture. It is generally accepted therefore that governments should shy away from operating important enterprises such as electricity and telecommunications.

In 1992, nine years after the demise of the PRG in Grenada the then Nicholas Brathwaite government took the decision to privatize GRENLEC.

Whilst this decision was good in principle, a lot of blame has to be leveled at that administration for the haste with which they went through with the 1994 sale of 50% shares in the company. The company was sold to the United States based WRB Enterprises Inc for the paltry sum of US$5.6 million. Other areas of negativity included the long monopoly status which GRENLEC is to enjoy up to the year 2073; the prohibitive compensation package that has to be meted out by any government wanting to reacquire the company if even for an interim period until privatization; and the lack of sufficient protection for electricity consumers.

There is no doubt that GRENLEC is operating efficiently. It has been and continues to be a most reliable supplier of electricity, and has been and continues to be a good corporate citizen by assisting a number of individuals, schools and charitable institutions. Additionally the company has made significant after-tax profits over the years: EC$10.3 million in 2010, EC$8.8 million in 2011 and EC$14.52 million in 2012.  Notwithstanding, the major challenge which presently confronts the company relates to what strategies are to be taken in order to cut down the costs of electricity to consumers. The company may well have to give serious consideration to having a cooperation agreement with the government of Grenada regarding the release of its monopoly status which status in any event may well be unconstitutional. Nationalization of GRENLEC may not be the answer.

NOW Grenada is not responsible for the opinions, statements or media content presented by contributors. In case of abuse, click here to report.

Tags: commonwealthelectricitygrenleclawrence josephnationisationorgpowerprgprivatizewrb
Next Post
Summer Juice Launched

Summer Juice Launched

Comment on story Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Home Sidebar NP 300x250

© NOW Grenada. All Rights Reserved. Published by Aqua Design Inc. | Terms of Use | Privacy Policy

No Result
View All Result
  • Front Page
  • Categories
    • General News
      • All
      • Agriculture & Fisheries
      • Arts & Culture
      • Business
      • Education
      • Environment
      • Health
      • History
      • Lifestyle
      • Law
      • Politics
      • Technology
      • Travel & Tourism
      • Weather
      • Youth
    • Sports
      • All
      • Athletics
      • Cricket
      • Football
      • Watersports
    • Community
      • All
      • Tribute
    • Crime
    • Features
      • All
      • Today in History
    • Opinion/Commentary
    • Press Releases
      • All
      • Advertisements
      • Notices
  • Video
  • Notices & Vacancies
  • Advertise
  • Contact Us

Copyright NOW Grenada

We are using cookies to give you the best experience on our website.

You can find out more about which cookies we are using or switch them off in settings. Visit our Privacy Policy | Terms of Use.

NOW Grenada
Powered by  GDPR Cookie Compliance
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful. Visit our Privacy Policy | Terms of Use.

Strictly Necessary Cookies

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.